Beijing is rethinking its position on stablecoins, once deemed risky and destabilizing, as U.S. dollar-pegged tokens like USDT and USDC become increasingly embedded in Asia’s financial systems.

In 2021, China’s central bank warned that global stablecoins could undermine the international monetary system and disrupt capital flows. Those concerns were outlined in a white paper on the e-CNY project, which also targeted Facebook’s now-defunct Libra. However, while Libra never took off, dollar-backed stablecoins are now widely used across Asia — including in trade financing and settlement — raising fresh concerns in China about the dollar’s growing digital footprint.

According to Evan Auyang, president of Animoca Group, China’s interest in stablecoins has accelerated in response to mounting regulatory clarity in the U.S., particularly following the passage of the GENIUS Act, which formally recognizes fiat-backed stablecoins. “The U.S. is moving fast, and that’s putting pressure on China to act,” Auyang told CoinDesk.

He added that the new U.S. framework cements stablecoins as an extension of dollar hegemony — one that China can’t ignore as it pushes for greater monetary sovereignty in the region.

Pivot Toward Regulated Alternatives

Animoca is part of a Hong Kong-based consortium, including Standard Chartered and Hong Kong Telecom, developing an HKD-denominated stablecoin. Auyang believes such initiatives are crucial as China explores offshore yuan (CNH) stablecoins as a controlled method to internationalize the RMB while maintaining capital controls.

“A CNH stablecoin gives China a way to expand the RMB’s global use without compromising monetary policy,” he said. Unlike the central bank’s e-CNY, which has mainly been used in institutional settings, stablecoins issued in Hong Kong or on public blockchains could enable broader access to Chinese assets.

Liquidity pools in Hong Kong could eventually facilitate cross-settlement between CNH, HKD, and e-CNY, providing an alternative infrastructure for B2B payments that doesn’t rely on the U.S. dollar.

Stablecoins Go Global

Auyang believes the GENIUS Act will have a domino effect globally. “Every country will eventually issue a regulated stablecoin,” he predicted. “This isn’t about replacing the dollar — that’s unrealistic given its liquidity — but about enabling trade through localized digital currencies.”

Even now, he said, there is sufficient liquidity in non-USD stablecoin pairs to support regional trade.

Beijing’s tone has clearly shifted since its 2021 white paper. What was once dismissed as speculative is now viewed as a necessary tool in the evolving global financial system.

Market Snapshot

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